The 10 Worst Economic Predictions Ever

From Bernanke's infamous 2008 "not forecasting a recession" call to Fannie Mae CEO Franklin Raines 2004 "subprime assets are riskless" commentary, the following 10 "predictions" - as opposed to Wien "surprises" - will go down in infamy for their degree of errant-ness...

10) Ben Bernanke, 10th January 2008 - "The Federal Reserve is currently not forecasting a recession."

A few months later, United States entered one of the wort recessions ever.

9) Herbert Hoover 1928: "The United States are nearer to the final triumph over poverty than ever before in the history of any land."

The Great Depression started a year after. Stocks lost almost 80% under his presidency.

8) James Glassman & Kevin Hassett (writers of the book : DOW 36000), 1999: "Stocks are now in the midst of a one-time-only rise to much higher ground–to the neighborhood of 36,000 on the Dow Jones industrial average."

According to their estimates, the Dow Jones was supposed to reach 36,000 points. The following years were marked by the Internet bubble, the Dow went down from 10,000 (book edition) to 7,200.

7) Georges W. Bush, 15th July 2008: "We can have confidence in the long-term foundation of our economy... I think the system basically is sound. I truly do."

This sentence was pronounced exactly two months before the bankruptcy of Lehman Brothers.

6) Donald Luskin (US investment guru), 14th September 2008: "Anyone who says we’re in a recession, or heading into one—especially the worst one since the Great Depression—is making up his own private definition of 'recession'."

According to Luskin, Obama deliberately worsened economic figures to discredit McCain for the presidential election that took place two months later. Lehman Brothers filed for bankruptcy the next day.

5) Irving Fisher (economist), 15th October 1929: "Stock prices have reached what looks like a permanently high plateau."

The crash of 1929 began the following week, the Dow Jones losing up to 85% of its value from the "permanent plateau"!

4) David Lereah (US economist), 12th August 2005: "I truly believe the housing market will continue to expand. But rather than the double-digit price appreciation we’ve seen, we might see that drop to a 5 or 6 percent appreciation sometime toward the end of next year."

Real Estate prices fell sharper between 2006 and 2008 than during the Great Depression.

3) Joseph Cassano (Head of Financial Products at AIG), 2007: "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these Credit Default Swap transactions."

The following year, AIG was rescued by the government after huge losses. Especially on CDS positions...

2) Franklin Raines (CEO of Fannie Mae), 10th June 2004: "These supbrime assets are so riskless that their capital for holding them should be under 2 percent."

The U.S. government intervened in 2008 to rescue Fannie Mae – in big trouble during the subprime crisis.

"this time is different." as in "worse." It has been argued that "progress" is a myth. in other words "what are we progressing towards?" Rousseau argued "by studying the arts and sciences we become only better monsters."

First, cost has nothing to do with value. Bitcoin's foundation is mathmatics itself. It is far easier to dilute all gold in the world with tungsten than it is to dilute the supply of bitcoins. The value is that you know with a fair certainty how many bitcoins exist as well as how many are ultimately able to exist.

I agree that bitcoins are not the final solution. Their ledger accounting concept is not ideal, and I think future implementations will definitely improve this concept. The beauty of a technology solution, however, is that it can improve, unlike precious metals.

Bitcoin at its foundation is simply a protest against what central banks are doing. Also, unlike precious metals, it is very easy to understand what the price of BTC will be long term. From a US perspective, if the FED continues to dilute the USD currency into infinity (previous history says this is probably likely), then BTC2USD will continue to rise. If you believe that the FED is serious about tapering, then BTC2USD will fall. The key difference to precious metals is that Central banks have very little control over BTC, and as long as they cannot find flaws in the protocol, this will continue.

I personally feel that the biggest risk to BTC at the moment is a DDos attack, simply because without the underlying nodes there is no way to exchange BTCs. This is definitely something that will have to be addressed longterm if BTC is to be used as a true global currency.

Once again I first admit that I am ignorant and for all I know, bitcoin could crash to zero, reach a permanently high plateau, or oscillate over an ever increasing spread for the next millenia. For those who have too much time on their hands, ponder this:

If the Beryellenanke cannot go to the trillion dollar platinum coin, the trillion dollar bitcoin will go to the Beryellenanke.

So apparently some of my friends are getting caught up in the bitcoin mania and I saw a facebook conversation about taking some bit coin profits and investing in this "stock". For .05 bitcoins you can get a bitcoin dividend! People going balls deep crazy on this shit. So you take e-currency to purchase e-stock in an e-miner. Why does this feeling like some derranged MMORPG?

Thanks for that link. Much appreciated. We all know how this one ends.

Perchance some strangers, who were born every minute, stumble across this post: I predict that somewhere along the line the dividend payout will not justify the price of the shares - just like every other share and piece of real estate on the planet, at which point, people will start buying shares in hope of capital gains - just like every other share and piece of real estate on the planet. Then, some people may be tempted to borrow money to convert to bitcoin to buy shares in the hope that the capital gains will pay for the interest, just like every other share and piece of real estate on the planet, well, close enough.

I mean, smart people should be able to do a bit of due diligence and figure out how many bitcoins are left to be mined and an expected return etc etc etc ... but since when have smart people ever driven prices?

Quite sure I've left out some important points here, feel free to add them.

So let me get this straight. This list contains: Economist, Politician, A book written by an Economist and a Harvard B.A. in Government, Politician, Investment CIO (whose only saving grace seems to be a hatred for Paul Krugman), Economist, Economist, AIG Financial Products Head, Fannie Mae CEO and an Analyst from Bank of America.

Seems the deck is stacked with economists - who practice their "craft" with the knowledge they can be wrong as much as they'd like with no penalty, Politicians - the master liars of the universe, who say anything to get the votes they need and corrupt financial Executives who know they are selling shit, but couldn't admit it in public without massive repercussions.

I like fonestar better than you. I don't know why...apologize if this offends. he's like a "kinder/gentler bitcoin." don't worry though...at some point your "distributed approach" will evolve into a pack of rampaging jackals soon enough.

I love bitcoin. Jimmy Cramer at a certain level "saved America" (certainly early in the crisis) in my view. Having said that how he does what he does being done live on television is an abomination...and CNBC knows it. This ain't Ozzie and Harriet...and while I might listen on occasion...I don't watch anymore. "Fuhrer approved" as they say. And look at the battle over Time Warner. Talk about ironies.

The greek statue (caption) reminds me of a joke. Two statues in a park were sitting there for hundreds of years. One was a greek god and the other a greek goddess. After what seemed like forever an angel came down out of the sky and unfroze them both. the angel said to them "I have unfrozen you, you have one hour to do whatever you wish. After that, I will freeze you both as statues for eternity. The two of them looked at each other and motioned over to the bushes. for about 5 minutes the bushes were rocking back and forth ferociously. Then the two of them came out and stood back where the were and prepared to become statues again. The angel said "you still have at least a half an hour left". The god looked at the goddess and said "okay this time I will hold the pigeon down and you shit on it".

I heard a joke today that you can tell your friends. A man went to heaven and asked God. Lord why did you make women so beautiful? He said, so you would find them attractive and multiply. the man then asked, but why did you make them so stupid? -So they would like you.

There's a smart group of people here with a good sense of humor, wittiness and sarcasm. Sometimes little things really crack me up, like that time Boris was talking about his Russian mother-in-law's Borscht soup, made with hand squeezed beet juice. :)

LMAO, I have plenty of stories about my Russian Mother-in-law, Mrs. M and they shit they do. For example, yesterday I came out of my den to see a cheesecloth of sorts hanging from the kitchen cabinets dripping something into a pan. What the fuck is that? It's some sort of homemade cheese she makes. I am originally from Wisconsin so I know cheese but not this kind and she eats it all every time. I had to inquire and she replied, "This milk is old now but still has fat content so I make this cheese. What the matter is with you Americans...you would pour it down the drain and waste." It's not a bad thing per se but sometimes I am scared to write about some of things she does for fear that no one would believe it. You just have to stand back and let them go.

However, on meat, you really have to watch Mrs.M. She can not cook a steak and refuses to eat it unless it is pretty much a hockey puck. I love my still mooing rib-eye steaks but she will not eat them unless they are ruined by over-cooking. There is a reason for this in that meat sold in her Soviet days was not to be trusted because it might be a couple of weeks old and not refrigerated. Even now, it does not mattter to her how fresh the cut is and how good the marbling is. I guess I will never have to worry about taking her to Ruth's Chris. That woman would probably try to tell them to boil, not broil, it for an hour or better. However, our daughter loves dead cow just the way I do.(and also likes my aresental of hot sauce selections)

I hate to break the news to you but Bitcoin is not only new but is still wet behind the ears and the umbilical cord has not even been cut yet. And when I say that, I mean the umbilical cord to the fiat currencies of the world.

Well its nice to see ZH sticking its neck out about the FUTURE in predicting the fate of Bitcoin.

On a long enuff time line do ZH predictions come true like the fall of PAx Americana WS pumped economy?

Both the salient position of ZH on the inevitable correction of WS, which is this site's "raison d'etre", as this one for Bitcoin, merit that we treat ZH by the same yardstick that they treat the general economy run by Potus, COngress and the FED/PD/Squid cabal alliance since over five years now.

When people judge others they should also accept that history will judge them by the same criteria.

Its worth documenting this truth for future NEt bloggers and readers in the exercise of our free will and "inalienable rights" as individuals.

(Not saying I agree or disagree with the TDs on these predictions, as at my own individual level I apply that logic to whatever I post here. For better or worse we are what we say in the virtual world of the Net, unless its tongue in cheek.)

Bitcoin is cool. I love the idea. But everything trades. Wall Street hype is here now. You can't surf any financial web pages without getting bitcoin thrown in your face. That means it is time to start looking for the exit. Bitcoin is not gold and there are crypto currencies coming out of the woodwork now.